Country Garden, one of the largest property developers in China, issued a warning that it could experience a loss for the first six months of the year that could be as high as $7.6 billion (£6 billion).
The announcement is the most recent indication of the significant challenges that are being confronted by the economy that is the second largest in the world. This week, official numbers demonstrated that China experienced deflation for the first time in almost two years.
In addition, there has been a significant decline in exports, and the unemployment rate among young people is at an all-time high.
In trading that took place in Hong Kong on Friday morning, shares of Country Garden Holdings fell by roughly 10 percent. According to an announcement made by the firm to the Hong Kong Stock Exchange, Country Garden "is forecast to report a net loss ranging from about RMB45 billion [$6.24bn; £4.9bn] to 55 billion RMB for the six-month period that ended on June 30, 2023."
The anticipated deficit can be contrasted with a $265 million profit for the same time period in the previous year.
The company also stated that it has established a special task group, which will be led by its chairman Yang Huiyan, to investigate the ways in which the company might be turned around.
The credit rating agency Moody's lowered the company's rating earlier on Thursday, citing "heightened liquidity and refinancing risks" as the reason for the change.
This occurred at a time when China was facing a lot of economic issues, which have raised questions about the pace of its recovery from the pandemic.
In official numbers that were released earlier this week, it was shown that the country's exports decreased by a larger-than-expected percentage in July compared with the same month a year earlier, while imports dropped.
A record 11.58 million university graduates are anticipated to enter the job market this year according to sources, which is another reason why the youth unemployment rate, which is already at a record high, is receiving a lot of attention.
Joe Biden, the Vice President of the United States, made the statement that China's rising economic problems make it a "ticking time bomb" on Thursday.
Mr. Biden recently stated that China is a ticking time bomb when speaking at a fundraising event in the western state of Utah. He was referring to China's high unemployment rate as well as its aging workforce.
The nation is also dealing with a rise in the amount of debt held by municipal governments as well as difficulties in the housing market.
Evergrande, formerly the most successful real estate company in China, disclosed the company's combined $81.1 billion loss for the years 2021 and 2022 the previous month according to sources.
It occurred at the same time that the company revealed its long-delayed earnings to investors. The company had defaulted on its loans in late 2021.
Problems in China's property sector, which accounts for around one third of the country's GDP, have the potential to have a significant effect on the nation as a whole because the industry encompasses everything from the construction of homes to the manufacturing of white goods that go inside them.
